Correlation Between LyondellBasell Industries and Summit Environmental
Can any of the company-specific risk be diversified away by investing in both LyondellBasell Industries and Summit Environmental at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LyondellBasell Industries and Summit Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LyondellBasell Industries NV and Summit Environmental, you can compare the effects of market volatilities on LyondellBasell Industries and Summit Environmental and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LyondellBasell Industries with a short position of Summit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of LyondellBasell Industries and Summit Environmental.
Diversification Opportunities for LyondellBasell Industries and Summit Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LyondellBasell and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LyondellBasell Industries NV and Summit Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Environmental and LyondellBasell Industries is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LyondellBasell Industries NV are associated (or correlated) with Summit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Environmental has no effect on the direction of LyondellBasell Industries i.e., LyondellBasell Industries and Summit Environmental go up and down completely randomly.
Pair Corralation between LyondellBasell Industries and Summit Environmental
If you would invest 0.01 in Summit Environmental on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Summit Environmental or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
LyondellBasell Industries NV vs. Summit Environmental
Performance |
| Timeline |
| LyondellBasell Industries |
| Summit Environmental |
LyondellBasell Industries and Summit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LyondellBasell Industries and Summit Environmental
The main advantage of trading using opposite LyondellBasell Industries and Summit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LyondellBasell Industries position performs unexpectedly, Summit Environmental can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Summit Environmental will offset losses from the drop in Summit Environmental's long position.| LyondellBasell Industries vs. International Flavors Fragrances | LyondellBasell Industries vs. Cabot | LyondellBasell Industries vs. Westlake Chemical | LyondellBasell Industries vs. Air Products and |
| Summit Environmental vs. LyondellBasell Industries NV | Summit Environmental vs. Cabot | Summit Environmental vs. Westlake Chemical | Summit Environmental vs. Air Products and |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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